The Winklevoss twins, the square-jawed entrepreneurs best known for their
bitter wranglings over Facebook, have turned their attention to dragging
Bitcoin out of the shadows and into the mainstream.

In a move that could come to mark a major new era for the virtual currency, Tyler and Cameron Winklevoss have filed to float their stash of Bitcoins on a conventional stock exchange. The former Olympic rowers have lodged papers for a $20m initial public offering of the Winklevoss Bitcoin Trust, which holds their Bitcoin wealth, and would be managed by the Winklevoss' investment fund, Math-Based Asset Services.

The flotation has yet to be approved by US authorities, which have already voiced their scepticism about the legitimacy of Bitcoins, but if they give the Winklevoss' plan the green light, it could help to clean up the virtual currencyﾒs image and put it within reach of many more investors.

Launched in 2009 in the wake of the global financial crisis, Bitcoins are "mined" using complex computer source code. The virtual currency started as a relatively niche method of payment, devised by an anonymous programmer, but can now be used for anything from online gambling to pizza delivery.

The payment method caught the attention of mainstream investors earlier this year after it soared in value. Bitcoin jumped from around $10 at the start of 2013 to a high of $260 on April 10, buoyed by concerns over the stability of the Euro and the increasing acceptance of Bitcoin by retailers. However, the spike in value was quickly exposed as something of a bubble, and Bitcoins have now fallen back below the $90 mark.

The digital currency has met with considerable opposition from regulators, which are concerned that it could be hijacked for money-laundering, and that it has no foundation in the real world. Bitcoin's developers anticipated some of these concerns at the outset, and guaranteed that the amount of code that could be "mined" is limited.

More recently, popular exchanges like Mt Gox have moved to reassure authorities that they will be subject to the same kind of regulation as more established currencies, for example by applying to register as a money services business that will comply with money-laundering laws.

The Winklevoss twins hope that bringing Bitcoins onto a traditional stock exchange will help to clean up their image further, and boost liquidity by allowing anyone with a share dealing account to buy and sell the coins.

"For many investors, the shares will represent a cost-effective and convenient means to access exposure to Bitcoins,ﾔ they said in their 74-page S-1 filing lodged with Americaﾒs Securities and Exchange Commission.

"It eliminates the friction of buying and reduces the risks associated with storing Bitcoin while offering similar investment attributes to direct ownership," Tyler Winklevoss told the New York Times. "The trust brings Bitcoin to Main Street and mainstream investors to Bitcoin."

This in turn could fuel another surge in the value of Bitcoin, and the Winklevoss twins' own holdings. The pair said in April that they had invested as much as $11m in the digital currency - thought to be more than any other investor.

Each share in the Winklevoss Bitcoin Trust would be worth around a fifth of the price of a single Bitcoin and would track their weighted average price on specialist exchanges such as MTGox KK, Bitstamp and BTC-e.

However, the S-1 also raises red flags about many of the issues which have made some traditional investors sceptical about Bitcoin, in a way reminiscent of the alarming health warnings on the backs of medicine packets. The currency could plummet at a later date if the developers change the terms and remove the limits on how much source code can be "mined", the Winklevoss twins said in their statement.

If hackers gained enough control, they could also "alter the source code and Blockchain on which the Bitcoin Network and all Bitcoin transactions rely", the S-1 added.

Meanwhile, the currency still faces an existential threat from regulators, who are deeply concerned by the rapid growth of intangible digital currencies, and the potential for abuse by money launderers.

The United States is studying the potential risk from online payment mechanisms like PayPal and Bitcoin. Last month, US authorities seized the accounts of one Bitcoin digital currency exchange operator, Mutum Sigillum, claiming it was functioning as an "unlicensed money service business". In May, regulators shut down another digital currency, Liberty Reserve, in what was described as one of the biggest money laundering scams ever uncovered.

The Winkelvoss brothers' interest in Bitcoins is the latest in a string of online ventures since their involvement with Facebook. The pair sued founder Mark Zuckerberg for $140m, alleging he stole the idea for elements of the social network from them. They have set up shop as venture capitalists and put money into a shopping website called Hukkster and an online community for money managers, SumZero.